The Centre reportedly denied the international agency permission to conduct an independent investigation into complaints of irregularities in the project.

This handout photo released by the Andhra Pradesh Capital Region Development Authority shows an aerial view of the city of Amaravati.
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Andhra Pradesh government/AFP

The World Bank on Friday said it had dropped a $300-million (Rs 2,063 crore) loan proposal for building Amaravati as the capital of Andhra Pradesh after the Indian government withdrew the request for financing the project, PTI reported.

“The government of India has withdrawn its request to the World Bank for financing the proposed Amaravati Sustainable Infrastructure and Institutional Development Project,” said an unidentified World Bank official.

The official said the international organisation’s board of directors was informed that the project was no longer under preparation. However, the official did not clarify why the government withdrew the request. “The World Bank is not in a position to comment on the nature of internal consultations conducted by the government of India,” he added.

Andhra Pradesh Capital Region Development Authority Commissioner Lakshmi Narasimham told PTI that the body received no communication from the Department of Economic Affairs of the Ministry of Finance about why the loan request was withdrawn.

The World Bank had sought permission from the central government to conduct an independent investigation into complaints of irregularities such as forced land acquisition, NDTV reported. However, this permission was declined.

But the YSR Congress Party government of Chief Minister Jaganmohan Reddy seemed unperturbed by the cancellation of the proposal. “If we deem it necessary, we ourselves will order a probe by an appropriate authority, as we also believe there were large-scale irregularities,” Rajya Sabha MP Vijaysai Reddy told NDTV. “But we do not want an international agency to do it.”

The YSR Congress Party had alleged irregularities in land acquisition during its time in the Opposition. Chandrababu Naidu-led Telugu Desam Party was in power then. Reddy ordered an investigation into these alleged irregularities after taking power in May, and sought a report within 45 days.